Entrepreneurship is one of the key factors to the development of any country. Since our forefathers’ times, the challenges entrepreneurs face in Nigeria continues to rise. Nigerians have been brought up in the slavery system of working.
Although we are trying to revive the spirit of entrepreneurship in Nigeria, we can’t deny that there are still challenges entrepreneurs face in Nigeria. Let’s take a look at some of the challenges entrepreneurs face in Nigeria.
It is a major belief in Nigeria that entrepreneurship is about starting up a business. Entrepreneurship is much more than starting up a business.
Entrepreneurship entails researching the business or service you are about to start or render, taking all the risks involved in the business, and transporting goods to the final consumers. Many Nigerians claim to be entrepreneurs without having all the criteria in check. That’s the reason there are small and struggling businesses in Nigeria. It won’t be ideal to talk about the challenges entrepreneurs face in Nigeria without proffering solutions to them.
8 Most Common Challenges of Entrepreneurship in Nigeria
Lack of Start-Up Capital
This is the most common of the challenges entrepreneurs face in Nigeria. No matter the vision and idea of business you have as a beginner entrepreneur, you need money to put your ideas and vision into the light. Nigeria’s economy has never encouraged starting or growing businesses because the economy distributed money. This is why entrepreneurship in Nigeria has been difficult from the beginning.
Many investors avoid investing in starting business or untested business ideas. This makes getting capital from investors to run a business starting a business very difficult. The main source of capital as a beginning entrepreneur is either through your savings or by asking from family members or friends who believe and are ready to key into your business.
Lack of Knowledge
There is a famous saying that ‘knowledge is power’. The Christians’ holy book of the also has a passage that reads “my people perish because of lack of knowledge”. One of the major challenges of entrepreneurship in Nigeria is the lack of knowledge. Many businesses in Nigeria don’t last long before closing up.
Prospective entrepreneurs wanting to start up a business don’t do enough research about the products they intend to sell or the services they want to render. And when they face challenges when running the business, owners don’t have enough knowledge on an issue, leading to early closure.
Doing good research to get your business knowledge will be the best decision you can take as an entrepreneur. You can reach out to other entrepreneurs in your business line and make inquiries about the business you intend to start or perhaps already running.
It is unarguably true that electricity is needed to run many businesses. Lack of electricity is one of the challenges of entrepreneurship in Nigeria. In developed countries where electricity is constant, this might sound funny. But with the epileptic situation of electricity in Nigeria has turned to one of the challenges entrepreneurs face in Nigeria.
Many businesses need to be opened from 8 to 6, and there must be constant electricity to run the business. Still, with Nigeria’s electricity situation, the ministry of power cannot assure 4 hours of constant electricity. This makes many businesses have petrol and diesel-powered generators. These generators must be powered on if there’s any power failure. The cost of running these generators adds up to the cost of running businesses.
One cannot overlook the problem of bad roads. As goods are being transported across the country through roads, the need for good roads cannot be overemphasized. But Nigeria can hardly boast 10 km of a good road.
Multiple Tax Imposition
Another delicate challenge of entrepreneurship in Nigeria is multiple tax dues and levies. However, individuals or businesses must pay tax as part of their civil rights. Tax payment has become outrageous in Nigeria. Although Nigeria’s Companies Income Tax Act (CITA) has approved only 39 taxes and levies, over 500 various levies and taxes state and local government agents impose.
Most of these taxes imposed have no legal backing; some are duplicated among those with legal backing. This has made the easy-running of businesses easily in Nigeria almost impossible, with entrepreneurs trying to pay or skip tax payment.
Lack of Access To Loans
Due to a lack of investors willing to invest in starting or growing businesses or business ideas, many businesses lack funds for start-up or even continue operations. This has made loans another alternative for generating capital. Securing loans from financial institutions has turned into one of the challenges of entrepreneurship in Nigeria. They are because Nigeria’s economy doesn’t support the start-up and growth of small businesses. Financial institutions are not ready to lend their money to a new business idea.
Another reason that makes loan inaccessible are the requirements for a loan to be secured. Most times, the interest placed by financial institutions on loans makes business owners run from acquiring loans. The interest rate is very high and cannot be paid by the business owner. This makes business owners run from securing loans from financial institutions.
The Challenge of Patience
We all know patience is one of the characteristics of a successful individual. In Nigeria, generally, many people lack patience, and including entrepreneurs. Business owners start a business and expect to start generating lots of money from it. They lack the patience to wait for the business to develop and start reaping the full potential; rather, they expect to start making lots of money almost immediately as they open it.
Generally, the purpose of opening a business is to generate money, but when starting a business, you should not be money-oriented at the beginning. The money will be made, but not necessarily at the beginning of the business. Most times, businesses take some time before they start making constant profits.
Poor Marketing Strategy
Many entrepreneurs start a business in a particular industry without getting the required knowledge base of how the industry operates. As they rush into a business, it takes little time to realize that they don’t know the business. This is one of the major challenges of entrepreneurship in Nigeria. Most times, it almost late, or it’s too late, and they end up closing their business almost as soon as they start them.
Good knowledge of how a market operates is required, and research is also carried out, and a strategy is put in place on how things are to be done before a business is launched. This will give the entrepreneurs the advantage of breaking the market’s grounds early enough with little or no setbacks.
Inconsistency In Government Policies
Entrepreneurs need a flexible and fair environment to run their business activities for a long time. But the inconsistency in Nigeria’s government policies has made the environment for businesses rigid and inconsistent for business activities. Entrepreneurship in Nigeria has been facing this challenge from the beginning. As a new government receives power, most of the previous government’s policies are amended or sometimes changed entirely.
5 Potential solutions to the challenges entrepreneurs face in Nigeria
Despite all the problems and challenges entrepreneurs face in Nigeria, there are still solutions to curb these challenges. There is still a great possibility for the growth and development of entrepreneurship in Nigeria. Currently, the federal government is creating plans and strategies to boost Nigeria’s economic situation, which will make the Nigerian economy friendlier to entrepreneurs.
Education of entrepreneurs
Education is one of the solutions to the problems and challenges entrepreneurs face in Nigeria. One of the major action of the government is the addition of different entrepreneurship courses to all students in the tertiary system of education.
Irrespective of your choice of career it is mandatory that you choose an entrepreneur skill to learn along with your main course of study. This will help aspiring entrepreneurs get the knowledge of the industry they are learning about. This will reduce the numbers of ignorant businesses persons.
Business owners face a lot of challenges. But there are books and other materials on the problems of entrepreneurship and how to solve the challenges entrepreneurs face in Nigeria. Business personnel need to be always open to new ideas and be ready to make amends when they realize their mistakes. Making research introduces a person to a lot of ideas and solutions on how to solve the problems he is having.
Efforts from the government
Efforts from the government will help to solve the challenges entrepreneurs face in Nigeria. The government should make good trade policies and back it up by the constitution so that it cannot be easily changed. Doing this will help entrepreneurs escape the challenges of entrepreneurship in Nigeria..
Creating new ideas and business plans is another solution to the challenges entrepreneurs face in Nigeria. Since the state of entrepreneurship has been depreciating in Nigeria with old ideas and approaches to the market, the need for new ideas cannot be overlooked. New ideas and creative ideas will help break new grounds and pave way for development of entrepreneurship in Nigeria.
For new entrepreneurs to have a good knowledge base of the market they are about to enter he should make goo research about it. There are books and other materials on the problems and challenges of entrepreneurship and how to solve these challenges. Business personnel should always make research on the market they are selling their products. This will them know what’s trending and they will not be left behind. Making research introduces a person to a lot of ideas and solutions on how to solve the problems he is having.
Help from assisting financial institutions
Financial institutions can also make the whole process of entrepreneurship easier through the provisions of financial securities to businesses. If financial institutions help, the process of acquiring financial securities like loans will be easy for entrepreneurs.